Objectives: The theory of good governance is a new paradigm in economic development which has been considered by the mid of 1990s, The experience of transition economies in Eastern Europe and former Soviet :::::union::::: as well as financial crisis in the world economy during two recent decades make clear the necessity of a new paradigm for development policy. After reviewing these experiences, this article focuses on the difference between good governance and structural adjustment policy. Method: This research attempts to review the literature of good governance theories and presents the evolution of economic development paradigm. Finding & Result: The political and economic competition and accountability are main strategies for improving governance. A better governance demands social and economic as well as local and national polices which discussed in this article.